Delta Swaps Empty Premium Seats for Coach Seats That Flyers Will Buy

Airlines are investing in expensive premium seats in a bid for lucrative business flyers, but its the coach seats with even the smallest amount of legroom that will fill up for the right price.

— Samantha Shankman

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Delta Air Lines Inc., seeking a revenue boost from its long-haul jet fleet, is pulling some premium seats that often sit empty on international routes so it can expand the cheaper coach cabin.

The share of premium seats filled by paying passengers on the affected flights averages in the high 60 percent range, Chief Revenue Officer Glen Hauenstein said at a Delta investor meeting today in New York. That figure drops from the low 90s on Saturdays into the upper 40s on midweek days, he said.

“It is the most discretionary and most peaky of all types of travel that we have,” Hauenstein said. Delta elected to make the changes after analyzing the cost of losing some low-end premium seats that are “not that profitable for us,” and replacing them with lower-fare economy seats, he said.

Reconfiguring planes to match the service level that fliers are willing to pay for is among the steps that Atlanta-based Delta said will produce an industry-record $2.6 billion pretax profit this year. The airline also seeks to improve flight operations and add more corporate customers.

A BusinessElite seat for a round trip on one of Delta’s Boeing Co. 767’s between New York and London’s Heathrow departing Dec. 16 starts at $6,060.30, with a coach ticket on the same flight selling for $1,552.30, according to the airline’s website.

Delta has begun removing 14 premium seats on some of its 767s and adding a net of 20 coach seats, Hauenstein said. It also plans to remove seven premium seats from some Boeing 777s and add 30 in coach. Details of how many planes are involved in the changes weren’t immediately available.

The airline operates 95 767s and 18 777s, according to a quarterly filing.

Editors: Ed Dufner and Molly Schuetz.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net. To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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